Understanding Your Home Insurance Policy Deductibles

Hurricane Season is upon us and many people are brushing up on their home/mobile home insurance policies and getting their evacuation plan in order. They’ve pulled out the declarations page and in reviewing, find there are 2 or maybe 3 different deductibles listed: AOP, Named Storm and/or Wind/Hail.

We’ll attempt to clarify these for you here….

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First it’s important to know that the deductible is the monetary amount you, the insured, is responsible for in the event of any claim/covered loss.

AOP = All Other Perils. In most cases this includes Fire, Windstorm, Hail, Falling Objects – any covered peril except a Named Storm.

The Named Storm deductible kicks in only in the instance of a storm which has been named by the National Weather Service, or the U.S. National Oceanic and Atmosphere Administration. This means a storm of any size (from a tropical storm all the way to a hurricane) which has been named. This also includes named winter storms!

An AOP deductible is usually a flat amount ($1000) whereas a Named Storm deductible is normally based on a percentage of the dwelling coverage (Ex 2%). In most cases this means the named storm deductible is more than the AOP deductible.

For example, if your dwelling coverage is $150,000 then your Named Storm deductible would be 2% of that or $3,000.00.

At one time (before “superstorm” Sandy in 2012) many policy holders had a “Hurricane” deductible. After this major storm was downgraded from a Hurricane to a Tropical Storm but still managed to wreak billions of dollars of damages, the Named Storm deductible was implemented.

Some policies, however, also have a separate “Wind/Hail” deductible which means the insured pays a higher deductible for any damages caused by wind and/or hail in lieu of fire or lightning or other covered perils.

Another source of confusion is whether or not the deductible applies to separate sections of the policy, but in most cases, if there are damages to the structure and resulting damage to contents/personal property only one deductible applies.

EX: A tree falls on the house causing roof damage and water leakage from the roof damages the interior and contents – the insured will only pay the appropriate deductible once.

It’s important to understand your insurance deductibles and what they mean to your out of pocket expenses so set an appointment with your agent and review your policies today.
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Hopefully we’ve helped you understand the different deductibles listed on your home/mobile home, dwelling/vacant dwelling and/or renters insurance policy. Remember, every company/policy is different so assume nothing. Give us a call and get the facts!

Tommy Curtis and Staff